The Training Workshop was divided into 5 sessions. Session 1, entitled “The Market Situation and the Challenges for Small Farmers” discussed the current market situation and the challenges confronting small farmers in engaging markets. The inputs from Mr. David Hitchcock, Agribusiness & Infrastructure Officer, FAO Regional Office in Asia and the Pacific, provided analysis of agricultural market trends in Asia especially as it is also affected by global trends.

Session 2, entitled “Agri-marketing in Asia: Agribusiness perspective” was delivered by Mr. Senen Bacani, Ultrex Management and Investment Corporation, former Secretary of Agriculture in the Philippines and member of LSFM Project Advisory Committee provided insights into the agribusiness perspectives in Asia.

Session 3 entitled “Understanding Agricultural Chains Towards Enhanced Market Access” focused mainly on insights and possible strategies that would be used to improve the value chain and provide greater benefits to small farmers. Dr. Nerlie Manalili, Advisor Market Access of Vredeseilanden based in Leuven, Belgium and member of LSFM Project Advisory Committee stressed the need to improve and upgrade market value chains that would ultimately benefit small farmers.

Case presentations from CEDAC and PhilDHRRA on the value chain analysis of free-range native chicken and fresh calamansi fruits provided specific examples of existing value chains that needed improvements to generate favourable benefits to small farmers. The presentations also provided insights on possible strategies that would improve value chains beneficial to small farmers.

Session 4 entitled “Market Positioning /Marketing strategies” discussed the importance of marketing plan and strategies, economy of scale and other basic marketing concepts. Dr. Wen-chi Huang, president of TaiwanDHRRA and Associate Professor Graduate Institute of Agribusiness Management of the National Pingtung University of Science and Technology, also a member of LSFM Project Advisory
Committee, stressed the importance of the organizing small farmers into producer groups based on products or commodities to be able to achieve economy of scale.

Sessions 1 to 4 were followed by 3 case presentations on actual market intermediation initiatives in Vietnam, Korea and Philippines. In Vietnam, a case was presented by Ms. Chu Thi Mai Anh of CRS Vietnam presented a case of CRS agro-enterprise development initiative in the province of Nghe An province in Vietnam. Mr. Chang Hyo Kim, president of the Red Kiwi Cooperation in Cheju Island in Korea, presented the case of small Kiwi producers in Korea, how they as association of Kiwi producers positioned themselves vis-à-vis Kiwi importation from other countries. Mr. Rene Guarin, Executive Officer of the Upland Marketing Foundation, Inc. (UMFI) in the Philippines, presented the case of UMFI as a market intermediator for small farmers and how UMFI has able to penetrate the supermarket chains in Metro Manila in the Philippines.

A total of 75 participants, resource persons, guests and secretariat attended and participated the First Regional Forum cum Training Workshop.

A synthesis after 4 sessions were presented highlighting existing CSO models of market intermediation. Included in the discussions were the new and classic forms for intermediation. There were at least five (5) CSO models of market intermediation involving small farmers. Among them is the two-sided platform, which is a model for market facilitation whose success depends on the capacity of farmers to group together, and the one-sided platform, which is a model largely utilized by rural and agricultural cooperatives.

Food safety and product quality has been identified as among the major barriers of small farmers/producers’ participation and engagement with markets. Because of the lack of information and technical support that small farmers get from government, small farmers have always been left behind in their efforts at complying with the growing sophistications of product quality standards set by governments and markets.

The over-all objective of the second regional training workshop was to provide information that can be used by used to develop capability-building interventions to suit specific needs on the production and marketing of safe and high quality products and thus enhance their market linkaging. The training workshop identified and provided information around distinct themes on food safety and product quality. The design was a structure and process that provide the flexibility to develop a training programme to meet the needs of a specific country, by allowing the participants to go over broad overview of food safety requirements and product quality standards.

Understand the rationale behind product quality and most especially food safety standards set by international inter-government bodies and national governments;

Articulate the importance of certification, guarantees, etc. as mechanisms to ensure food safety and product quality;

Present practical steps that would address food safety and product quality issues in their own specific organizations and communities; and

Identify specific needs that require support from government and other stakeholders to improve safety and quality of those mentioned chosen commodities.

Site Field Visit
The workshop participants were divided into two groups for the field visit. The first group visited Teuk Vil station, a research, demonstration, training and exchange visit station of target farmers and target groups from other NGOs. Here, SRI technique is tested and demonstrated. Organic fertilizers, such as compost, fermented fruit and plant juices are also tested and demonstrated in different kinds of crops, e.g. vegetables, rice, fruits and others. Teuk Vil Station is supported by funds from APSARA Authority which is a certain percentage of the revenues from the Angkor Wat admission fees.

After the visit to Teuk Vil station, the first group visited farming communities in Angkor Thom district where they interacted with farmers practicing composting and sustainable agriculture, and where they met with the finance officer of the village’s saving cooperative. They were also happy to witness community’s preparations for a wedding ceremony. The first group ran out of time for sharing and reflection.

The second group visited organic farm in Ba Kong, a nearby public market, and one of CEDAC’s distribution center for organic rice. The following insights and learnings were shared by the group:
•Shifting from conventional to organic vegetable farming results to reduction in production cost and improved yield which allow farmer to increase its capacity to supply existing market

Price premium for organic product cannot be enjoyed by farmers without the presence of effective intermediation mechanism that will develop the link between them and the appropriate market

Consumer awareness is necessary to build the market for organic product

Consolidation of individual small-scale farmer is necessary to meet the required market volume

Technology transfer and capacity building interventions are not enough to upscale the volume and quality of organic production, the following support services should likewise be advocated to ensure expansion of success cases:

3. “The importance of commodity-based associations of small producers in addressing competitiveness and for successful market engagements” Third Regional Training Workshop, June 28 to July 2, 2009, VIP Hotel, Cagayan de Oro City, Philippines

The workshop was designed to help participants understand the importance commodity-based associations of small producers to achieve economies of scale and a stronger bargaining strength in the market. PhilDHRRA, the in-country anchor for LSFM in the Philippines, hosted the event and provided a festive welcome dinner featuring a traditional Manobo dance number and the participants’ diverse backgrounds and cultures.

Sixty five (65) participants representing networks of rural NGOs and people’s organizations from nine countries in Southeast and East Asia gathered in Cagayan de Oro City and discussed how the small-scale farmers and producers can hurdle the extremely difficulties and challenges in entering and engaging competitively in the market. They are united in the belief that small farmers and farmholders can survive and compete in the market if they are organized as commodity-based associations of small producers.

The participants of the workshop realized how difficult the situation of small farmholders had become over the last 15 years due to various factors that influenced changes in agricultural markets. Regional and bilateral agreements on the removal of tariffs have pushed down the prices of highly-subsidized agricultural imports from highly-developed countries, to the detriment of small farmers in Asia. Consumer preferences have increasingly shifted from fresh farm products to processed food due to increasing urbanization. Small farmers who have not been able to claim their space in agricultural sectors and industries will now have to face the additional hurdle of increasing market segmentation.

Models of commodity-based small producers association in the more advanced countries in Asia, such as Korea and Taiwan, provide the way to a better future. The associations in these countries have grown so big that their small farmers actually earn more than salaried professionals. Mr. Seo Dong Woo of Korean Producers Association and Dr. Wen-Chi Huang of Taiwan Wax Apple Development Association (TWADA) presented how they reached this stage by narrating their history, marketing strategies, and how they have been able to address the challenges related to economies of scale, product quality, and food safety. The successful experience of small cassava farmer in Agusan in dealing with an established food and beverage corporation, narrated by Agnes Bolaños of Agri-Aqua Coalition for Development, provided significant insights about how small farmers dealt with the challenges of dealing with a huge, established, and stable market, and the opportunities in engaging the private sector.

Participants from various ASEAN countries identified the key factors to ensuring success in this endeavor. Government support will definitely be helpful, as well as the leadership provided by people’s organizations in breaking through the market. Quality control and product promotion, systematic consolidation for greater bargaining power, the identification of competitive advantage, and thorough work on internal organization strengthening and development will all help push commodity-based small producers associations to success.

Participants have likewise identified the important functions of commodity-based small farmers/producers to include the following:

Easing access to input credit through member-based saving and credit schemes or through group lending schemes involving microfinance institutions

Consolidation of commodities for marketing, especially where they are linked to a major markets

Ensuring continuous supply of marketed products/commodities

Underlying these elements is the commitment to the principles of holistic, diversified, and sustainable agriculture as the foundation of any and all economic undertakings of commodity-based associations of small producers. The basis of their engagement with various players, especially the business/private sector, remains the same as the fundamentals guiding their advocacies for agrarian reform and rural development– that is, social justice, environmental protection, sustainable agriculture.

A visit to the Northern Mindanao Vegetable Producers Association (Normin Veggies) in Barangay Dahilayan, Manolo Fortich, Bukidnon was done on the last day so that the participants will have a common community-based experience as one reference for concretizing their learning and insights.

Organic Rice in Indonesia
Organic farming was introduced in Indonesia against the failure of green revolution. Organic rice is developing in Indonesia especially influenced by the rising cost of inputs and the development of health conscious consumers.

Organic rice was selected as the focal commodity of LSFM in Indonesia. The decision was based on earlier consultations with different stakeholders and the members of Bina Desa network. The growth potential of organic rice. Rice is the main staple for Indonesians. With a population of over 215 million people that is still growing, there is no doubt that organic rice will have a market in the future in Indonesia. Production level shows an increase but there is no proper marketing channel yet, therefore many products still using conventional marketing system.

Rice is widely grown in Indonesia and is largely grown and produced by small farmers. The knowledge about natural farming has significantly reduced production costs and has mobilized the involvement of family and local labor, generating local employment opportunities. It has also provided specific roles of women in the agricultural production process and increased the capacities to earn more income for small farmers’ families.

The Indonesian’ government’s program “Go Organik 2010” and the opening of premium rice export are part of opportunities of organic rice development. Reduction of outside agricultural input in natural farming avoids farmers from the dependence on subsidized chemical input. These things are expected to give impacts on government’s support toward organic rice farmers.

Tea in Vietnam
Vietnamese people have planted tea for over three thousands years. Tea production is concentrated in the northern and central Vietnam spreading over the provinces of Tuyen Quang,Yen Bai, Phu Tho, Son La, Ha Giang, Lai Chau, Lao Cai, Thai Nguyen, Nghe An. There are about 6 million Vietnamese who are dependent on tea for livelihood. Interventions to improve production and marketing of tea would bring about meaningful solution at reducing rural poverty in Vietnam.

In recent years, the area of tea cultivation have increased rapidly, from an estimated of 5,400 hectares in 1975, the area of cultivation has reached more than 80,000 hectares in 2000. The output was about 40,000 tons in 1995, now stands at over 100,000 tons, of which export quantity is steadily rising.

Vietnam tea products have made their presence in more than thirty countries world-wide. Vietnam now ranked as the 6th among the 15 Asian countries exporting tea to the world market. The tea industry in Vietnam has excellent potential and prospects for future growth but there is a need to address the growing concerns about Vietnam tea quality resulting from the recent market changes and preferences that require higher quality, finer style and reasonable prices of tea products.

Calamansi in the Philippines
The Calamansi an evergreen trees of the genus citrus of the family Rutaceae, is a citrus fruit endemic in the Philippines. This plant is characterized by wing-like appendages on the leaf-stalks, white or purplish flowers and fruit with a spongy or leathery rind and a fruit with juicy pulps divided into star-like sections. It is rich in phosphorous, calcium, iron and Vitamin C. It is the most popular and most commonly used citrus fruit in the country. Its juice is nutritious and traditionally made into a fruit drink that helps prevent respiratory diseases. It also helps strengthen the bones and stimulate growth especially among growing children. It can be used as a flavouring ingredient and additive in various food preparations. Its pulp is used as a major ingredient in beverages, syrups, concentrates, and purees. The peel is made into jams, candies, and marmalade. With its alkalinizing effect, on the body, calamansi helps circulate blood evenly and facilitates normal digestion.

Recently, with the emerging new technologies in food processing, calamansi use is no longer exclusive to the food industry but has expanded into the cosmetics and industrial manufacturing as material to astringents, whitening creams and solutions, bath soaps, laundry detergents and cleaning solutions.

Calamansi is largely grown by poor small farmers. It is estimated that around 50,000 rural households depend on calamansi as the primary source of income. Calamansi is widely grown across the country but concentration of small farms growing calamansi are in the provinces of Mindoro Oriental, Nueva Ecija, Quezon in Luzon, Guimaras in the Visayas, Davao, Zamboanga Sibugay, Agusan del Sur and Compostela Valley in Mindanao.

While it is possible to achieve a whole year production, Calamansi prices are dominantly low the whole year round and if wholesale price is high, farmer’s potential for more income is dissipated due to the layers of players along the supply chain (pls. refer to figure 1). Aside from that, knowing that the market is just there, it is difficult for the farmers to explore them and market their own produce. The tendency is they just leave off their produce hanging on its tree because it would cost them even more if they harvest them with no buyers available or prices are too low that it could not cover their production cost.

Free-range Native Chicken in Cambodia
In Cambodia, native chicken is an integral part of small farmers livelihoods. A small flock of native chicken is an asset that is easy to raise and maintain. Native chicken raising is one of the many activities in a diversified rural farming systems. More than half of Cambodian farming households keep native chickens. Revenues from native chicken production represent a very small proportion of total household revenues, but women accrue most of this income, which allows them to cover daily household requirements and education expenses.

Despite rising per capita incomes and dietary improvements in the last 10 years, malnutrition levels in Cambodia remain high. Native chicken meat and eggs are among the most and easily accessible sources of protein. Small farmers usually keep a small flock of native chicken for food and cash incomes.

In Cambodia, the rural poor are largely small farmers which depends on a small piece of land for rice production. Poverty reduction is a multi-faceted task. A much better integration of native chicken production into the small farm enterprise could contribute significantly to the improvements of food and cash incomes. With the increased attention to the production of rice and other crops, the existing value chain of native chicken that offers very small incentives, native chicken raising is given least attention by small farmers, yet the market demand for native chicken meat remained high. A study by CEDAC has indicated that about 11 tons of chicken meat per day are consumed in Phnom Penh and surrounding urban areas. About 80% are the free range native chicken.

Mapping of CSO Marketing Initiatives
The mapping results indicated that only a small number of CSOs are involved in marketing/market intermediation servicing small farmers and producers in the four pilot countries. Although there were other marketing initiatives, but these initiatives were focused on enterprises of micro-entrepreneurs involving handicrafts, food supplements, novelty items, etc.

Calamansi
The value chain study of fresh calamansi fruits have highlighted the following key information:

Calamansi is widely grown in 16 provinces but there are only very few small associations of small calamansi farmers.

Small calamansi farmers are largely unorganized.

Demand for calamansi has been increasing in the last ten years. Calamansi products are now, not only exclusive for food, but expanding into the beverage industry, laundry and cleaning applications as well as cosmetics and other household and consumer use.

Existing organizations of calamansi farmers are small and are operating at the barangay level. These organizations are not market oriented but largely organizations for “claimmaking”/advocacy groups involving local government policies or self-help groups

Some calamansi farmers are members of mixed-crop small farmers organizations

The supply chain is made up of several layers of (dicers) at the local level including middlemen as consolidators at the regional levels. The large volume of fresh calamansi fruits are shipped to Metro-Manila and distributed to wet markets, supermarkets and processors through a few wholesalers. The multilayered supply chain affects farm gate prices of fresh calamansi fruits.

Price curve is characterized by lows on months beginning April and highs beginning November until March of each year.

Processing calamansi fruits into puree and then powder is the most profitable enterprise in the value chain. The price of 1 kilogram of fresh calamansi is between US$0.18 to US$0.26, the same 1 kilogram of calamansi will get a price of US$ 1.5 if sold as puree/extract but the same kilogram will have a price value of US$ 12 if further processed into powder.

Free-range native chicken

The raising of native chickens is an integral part of the farming systems of Khmer farmers as they are the supplementary source of protein (eggs and meat) and cash incomes.

Most small farmers invest money for native chicken production because the amount of investment is very affordable. To start, one has to only have to buy very few chicken stocks and increase their population gradually according to their capacities.

Demand for chicken meat have steadily increased in the urban and urbanizing areas in Cambodia. For example, around 11 tons of chicken meat per day are consumed in the Phnom Penh. The average demand of chicken per district town is 500 kgs per day which is comparable to the provincial town.

Current farm gate price of live chicken is Riels 7,730 (US$1.93) while retailer price is Riels 19,500. (US$4.8) and fried chicken between Riels 24,000 (US$5.9) to Riels 30,000 (US$7.4).

Middlemen buy chicken from small farmers, to minimize transportation costs they use motorbikes and haul live chickens without regard of safety and in the process stress them affecting quality. To gain weight, middlemen usually feed stressed chickens with large amounts of feed and inject water into chicken meat.

Small farmers/native chicken producers are largely not organized in Cambodia.

Tea

There are three different value chain flows of tea products in Vietnam, briefly described as those:

from state farming groups to state enterprise

from cooperatives to markets

from farming households to assemblers/consolidators

from freelance households to assemblers/ consolidators

The value chain study showed that there are 4 major groups of farmers involved in the production of tea. These groups are the following:

state farm households: these are farm workers who received land from the state farms when these state farms was converted into the state companies in accordance with the Decree 01 issued by the Government in 1995, and those households who have land and signed contracts with tea companies;

cooperative households are members of cooperatives (including members of groups).

Supporting agents are the Ministry of Agriculture and Rural Development, Ministry of Trade, NGOs, mass organizations such as the Farmers’ Union, the Women’s Union, the Youth Union.

Family farm households have smaller production scale and not members of cooperatives or state farms;

Free-lance households have the smallest scale of production. They are not members of cooperatives or state farms;

The family farm households and free-lance households are the most vulnerable groups of small farmers involved in tea production. They have been targeted by VNFU as the target groups for this project.

Organic rice
Production of rice in Indonesia was reaching 55 million metric tons in 2007. About 55 percent is produced in Java Island.

Organic farming was introduced in Indonesia earlier against the failure of green revolution. Organic rice is developing in Indonesia and is especially influenced by the rising cost of inputs and the development of health conscious consumers.

Coordination of organic rice trade system has not been specifically regulated by the government.

Organic rice consumption in Java and Bali are larger compared to consumptions in Eastern parts of Indonesia. This is affected by condition of the regions, availability and access of consumers to organic rice and media promotion.

Value chain at the local level has three types:

pre-harvest purchasing system are farmers particularly common among very small farms with an average size of 0.3 ha.

village collectors as middlemen who also own a rice mill so they can mix the rice according to what the consumer wishes.

city-based big merchants with larger capital resources and provide loan to the village collectors and city retailers. City big merchants also own big warehouse to store large quantities of rice.

Indonesian Bureau of Logistics (BULOG) a government agency tasked to manage rice rice supply and control prices. BULOG also exports rice when the national supply exceeds the national requirements. The mechanism the BULOG is done by absorbing the surplus marketed by the farmers during harvest period. Absorption of harvest surplus is done through various channels especially working partners that include middlemen, traders rural cooperatives and task forces. BULOGs capacity to absorb rice volumes varies, in Jakarta 91% of farmers rice harvest is absorbed by BULOG but in Central Java, only 23% of the total harvested volume pass through the BULOG mechanism.

The emerging value chain of organic rice is short, removing the roles of brokers, agents and other opportunists in the value of chain. The basic difference of chain value of organic rice is the development of relationships between farmers/farmer groups and consumer groups.

We are sharing with you our latest publication – the Mapping of Marketing Intermediation of CSO in Indonesia and Value Chain Analysis of Organic Rice in Indonesia.

This publication contains the initial outputs of the research component of AsiaDHRRA’s Regional Project on Linking Small Farmers to Markets (LSFM) as implemented by Bina Desa (InDHRRA) in Indonesia. This report is part of the outputs of the participatory market researches and studies on specific commodities chosen in each pilot in four countries: tea in Vietnam, fresh calamansi fruit in the Philippines, free-range native chicken in Cambodia and organic rice in Indonesia.

These two studies, mapping of CSO marketing intermediation initiatives and value chain analysis involving organic rice, were initiated and participated by farmers themselves, the LSFM team of Bina Desa and its partner organizations, rural cooperatives and farmers organizations.

Representatives from networks of rural NGOs and people’s organizations from nine countries in Southeast and East Asia gathered in Cagayan de Oro City from June 28 to July 2 to discuss how the small farmers and farmerholders can hurdle the extremely difficult challenges of entering and participating competitively in the market. They are united in the belief that small farmers and farmholders can survive and compete in the market if they are organized as commodity-based associations of small producers.

The event, organized by AsiaDHRRA, is the third of a series of ASEAN-level workshops implemented under an ASEAN Foundation project entitled “Linking Small Farmers to Market” which aims to establish the mechanisms that will help commodity-based associations of small producers achieve economies of scale and a stronger bargaining strength in the market. PhilDHRRA, the in-country anchor for LSFM in the Philippines, hosted the event and provided a festive welcome dinner featuring a traditional Manobo dance number and the participants’ diverse backgrounds and cultures.

The participants of the workshop realized how difficult the situation of small farmholders had become over the last 15 years due to various factors. Regional and bilateral agreements on the removal of tariffs have pushed down the prices of highly-subsidized agricultural imports from highly-developed countries, to the detriment of small farmers in Asia. Consumer preferences have increasingly shifted from fresh farm products to processed food due to increasing urbanization. Small farmers who have not been able to claim their space in agricultural sectors and industries will now have to face the additional hurdle of increasing market segmentation.

LSFM is set to hold the 3rd Regional Training Workshop of the Linking Small Farmers to Market project towards end of June 2009 in Cagayan de Oro City, a city in the northern part of Mindanao island, the Philippines.

This workshop will emphasize the importance of small farmers organized into commodity groups so that issues of competitiveness, economy of scale, food safety and product quality as well as regular delivery of product supply are easily addressed. Presentors from the Taiwan, Korean and the Philippines will share their experiences about their engagements with markets as a commodity-based association of farmers.

Participants will also visit the farm site of Normin Veggies, a vegetable producers association in Northern Mindanao.

LSFM-Philippines held its 2nd in-country training-workshop last March 17-18, 2009 at the Ugnayan Hall, Partnership Center. The training-workshop, with a theme: “Complying with Market Requirements on Product Quality and Food Safety,” focused on enhancing the knowledge and skills of small calamansi farmer leaders, LGU and NGO agricultural extension workers/community organizers on the importance of standardization on product quality and food safety, and, on meeting such market requirements.

AsiaDHRRA together with the Cambodian Center for Study and Development of Agriculture (CEDAC) will hold the Second Regional Training Workshop entitled “Complying with Market Requirements on Food Safety and Product Quality” under the Linking Small Farmers Project (LSFM) supported by the ASEAN Foundation and the World Rural Forum on January 19-23, 2009 in Monoreach Angkor Hotel, Siem Reap, Cambodia

This Regional Training Workshop aims to enhance the awareness, knowledge and skills of participants from 10 Asian countries on the importance of food safety and product quality standards so that they become initiators, implementers, advocates and supporters of initiatives that would help small farmers upgrade their capacities at producing quality and safe food and agricultural products.

This training workshop is the second of a series of workshops at the regional level.